Manulife, HDFC Life said to bid for HSBC India insurance arm

April 09, 2013|Reuters

HONG KONG/MUMBAI, April 10 (Reuters) - Canada's ManulifeFinancial Corp and the Indian affiliate of StandardLife plc are among the suitors to place first-round bids forHSBC plc's Indian life insurance business, a stake valued atabout $200 million, people familiar with the matter toldReuters.

HSBC plc, Europe's biggest bank, is selling its 26percent stake in a life insurance joint venture with two Indianstate-run banks, as it sheds noncore businesses globally.

The winner of the auction will get immediate access to about5,500 branches of the two state-run banks. Bancassurance isemerging as a key tool to sell insurance products across Asia asthe life insurance industry matures in the region.

HDFC Life, a joint venture between India's top mortgagelender HDFC Ltd and British insurer Standard Life ; Birla Sun Life, a venture between Indian conglomerateAditya Birla Group and Canada's Sun Life; and ICICI PrudentialLife, a joint venture between India's No. 2 lender ICICI Bank and Britain's No. 1 insurer Prudential, areamong the bidders to submit first round bids last week, thepeople said.

HSBC's two Indian partners in the venture - Canara Bank Ltd and Oriental Bank of Commerce Ltd - couldalso pare their stakes, the people said, although no finaldecision has been made on this. That could push the deal valueto $800 million, including a bank distribution agreement, theyadded.

"The biggest attraction for any Indian or foreign bidder inthis joint venture would be the vast distribution network, whichis absolutely essential in a country like India," said one ofthe sources directly involved in the process. "There are a veryfew good partnership opportunities available for foreign playersin India, this venture is one of them."